Telus won't be reimbursed for BC Place signs after failed renaming deal

Jeff Lee and Jonathan Fowlie, Vancouver Sun03.09.2012

A rendering of the proposed Telus Park sign at BC Place stadium. The provincial government won't reimburse Telus for signs it ordered for BC Place or for the cost of negotiating a now-failed stadium renaming agreement, Jobs, Tourism and Innovation Minister Pat Bell said Thursday.Telus
/ Special to the Vancouver Sun

There are no large visible signs for BC Place in Vancouver on Tuesday, March 08, 2012. Telus has been told it cannot buy the naming rights to BC Place.Les Bazso
/ PNG

A worker repels along a cable atop BC Place where it is reported that grease from the cables is staining the roofing material at BC Place.Les Bazso
/ PNG

There are no large visible signs for BC Place in Vancouver on Tuesday, March 08, 2012. Telus has been told it cannot buy the naming rights to BC Place.Les Bazso
/ PNG

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VANCOUVER -- The provincial government won't reimburse Telus for signs it ordered for BC Place or for the cost of negotiating a now-failed stadium renaming agreement, Jobs, Tourism and Innovation Minister Pat Bell said Thursday.

But the province will renegotiate an agreement with the Telus for an extensive digital technology services package it installed in the Vancouver stadium last year as part of the overall naming plan, he said.

That technology deal, which will cost taxpayers millions of dollars over its 20 year life, was installed by Telus largely at its own cost in the expectation its $40 million bid to rename the stadium "Telus Park" would be accepted by government.

The tech deal turned BC Place into one of the top digital-enhanced stadiums in North America, giving its owner the B.C. Pavilion Corp the potential for millions of dollars in new revenue through specialty digital advertising, and better returns in ticketing, merchandising, food and beverage and suite revenues.

Neither Telus nor PavCo would reveal cost of the deal or the revenues it will generate.

Bell said PavCo had always intended to make those digital upgrades to the stadium and would have engaged Telus as a contractor since it is the prime supplier of that technology in B.C. But he acknowledged that PavCo wanted to tie the naming rights and technology deal together. That's why the two parties signed a letter of intent in March, 2011 that covered both deals under one agreement.

Bell said PavCo made it clear to Telus that while it wanted both deals together, it was not committing to the name change without government approval. If the province killed the name deal, PavCo would renegotiate the technology deal separately, he said.

The government cancelled the naming deal last week after it said the $40 million price tag to change the stadium's name to "Telus Park" was not rich enough and that the public wouldn't want to lose the building's iconic name. The cancellation came after PavCo three times courted Telus to apply for the sponsorship, and then spent 21 months negotiating the deal. Telus said the naming rights deal was so solid that it went ahead and spent millions of dollars on signs that were to be mounted externally on the stadium.

Bell said the naming deal would not have given Telus exclusive advertising rights inside the building, and that other sponsors, such as rival communications company Bell Canada, which supports the Vancouver Whitecaps, have some rights to advertising space.

But Minister Bell said Telus was not given the okay to have the signs constructed and for that reason he's not going to reimburse the company.

"I have been asked whether I felt the province should reimburse them for (the signs) and the answer to that is a very clear no," he said. "If Telus went ahead and had them made, it was done strictly of their own volition. There was no indication from the province or PavCo that they should be moving ahead with that."

A Telus spokesman said the company would not reply to the minister's comments.

In Victoria, New Democratic Party tourism critic Spencer Chandra Herbert said the government still owes the public a clear answer on why they cancelled the deal with Telus.

"On the naming issue, really it's about a partnership with Telus that the Liberals started. They sought it out, went after it again and again and again, had PavCo sign a memorandum of understanding with Telus so it looked like it was so far down the line that they had it in the bag and so Telus went out and spent millions of dollars on signs and they went and spent millions on refurbishing BC Place to fit these signs on," he said.

"Now the Liberals have decided that's not what they want to do," he continued. "Why did they court Telus so vigorously to get a deal? I think they have to answer that question and they haven't."

PavCo Chairman David Podmore told The Vancouver Sun on Wednesday the Crown corporation arranged the 20-year naming deal to generate about $2 million a year. But Bell insisted to reporters Thursday the deal was only worth $1.75 million a year or $35 million over its lifetime, and that amount was not enough to justify losing the BC Place name.

Telus has confirmed it would have paid sponsorship fees of $35 million, but that it also planned to invest another $5 million in "activation and leveraging", which would have included charitable fundraising events to support causes such as the David Foster Foundation and a partnership Telus was pursuing with the Nature Conservancy of Canada.

The government says it believes PavCo can replace the lost naming rights revenue with other advertising opportunities inside the building. But Podmore said Wednesday he believes the government must now relieve PavCo from any such obligation since it already is selling advertising inside.

Chandra Herbert also again demanded to see a business plan for the BC Place project.

"The Liberals said it would pay for itself. They never provided one iota of proof that it would," he said. "I don't think there is a business plan, because if they had a business plan they would provide it," he continued.

"They would provide it so we could test the assumptions, so that the public would know if their dollars were being well spent, but the Liberals refused to do that again and again and again."

jefflee@vancouversun.com

jfowlie@vancouversun.com

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Telus won't be reimbursed for BC Place signs after failed renaming deal

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